BEIJING — With growing global attention on workers’ rights and environmental issues, China’s textile and apparel manufacturers need to step up their efforts in corporate social responsibility to remain competitive, industry leaders said Tuesday at a forum here devoted to the issue.
This story first appeared in the December 19, 2007 issue of WWD. Subscribe Today.
Chinese industry executives and government officials lauded firms’ first steps in self-policing, and said companies looking for long-term success should be devoted to better working conditions and environmental stewardship.
“We need to reform the textile and apparel industry from just being big into being a real powerhouse,” Du Yuzhou, president of the China National Textile & Apparel Council, told an industry forum at the Great Hall of the People.
Sun Ruizhe, vice president of the industry association, said corporate social responsibility will be critical in improving the industry and making it more competitive with European and American counterparts. Sun said international buyers and trade partners are increasingly concerned with social issues, and China’s garment and textile manufacturers need to answer those demands.
A year ago, the industry launched a pilot project in about 100 companies across the country calling for self-reporting on a range of issues related to workplace and environmental conditions, as well as management training about the important issues. The first year under the “Committee for the Promotion of Corporate Social Accountability System for Chinese Textile Enterprises” has seen a positive effect, Du said, and will be expanded this year.
Du noted that while China has some 400,000 companies in the textile and apparel sector, competition from other countries means the industry must evolve and improve. Rising wages have already cost China its edge as a source of cheap labor and other countries are eager to take a piece of its manufacturing pie. Improved management and better working conditions mean higher costs, the speakers said, but the competitive edge those companies earn pay off with worker loyalty and customer satisfaction.
Several examples were noted of factories that increased their own costs by as much as 30 percent by following international guidelines for working conditions. The companies that had better conditions, although incurring higher costs, saved money in recruiting, hiring and training new employees.
Retention of workforce is a big issue in China’s manufacturing industries. Du noted that of the 20 million workers in this industry, at least 80 percent are domestic migrants who have traveled far from home to the factory. China maintains a rigid household registration system that means its mass force of internal migrant workers are due fewer or no benefits when they leave their hometowns for factory jobs.
Du said the industry has grown immensely in the past few years. From 2002 to 2006, China’s textile and apparel industry increased its labor force by 35 percent and increased productivity by 32 percent. Exports during that period rose 133 percent, while profits were up 164 percent. Growth has slowed slightly in the past year, Du said, and major economic challenges in the overheated Chinese economy remain.